IMF ap­proves sec­ond tranche of Egypt loan

Muscat Daily - - BUSINESS -

Cairo, Egypt - The In­ter­na­tional Mon­e­tary Fund (IMF) ap­proved a sec­ond tranche of a US$12bn loan to Egypt, prais­ing the coun­try’s tough eco­nomic re­forms that have fu­elled in­fla­tion.

In a state­ment on Thurs­day, IMF man­ag­ing di­rec­tor Chris­tine La­garde said the ap­proval of the roughly US$1.25bn tranche showed ‘the IMF’s strong sup­port for Egypt in th­ese ef­forts’.

The IMF and Egypt had agreed the loan last Novem­ber, as the North African coun­try de­val­ued the pound and af­ter it in­tro­duced a value-added tax in a bid to boost gov­ern­ment fi­nances and its for­eign re­serves.

Egypt has also slashed fuel sub­si­dies, most re­cently last month. “We be­lieve that th­ese ef­forts will yield re­sults,” La­garde said.

But concerns re­mained about in­fla­tion, which hit 32.9 per cent in April be­fore de­clin­ing slightly in May. “The au­thor­i­ties’ im­me­di­ate pri­or­ity is to re­duce in­fla­tion, which poses a risk to macroe­co­nomic sta­bil­ity and hurts the poor,” said David Lip­ton, the IMF’s act­ing chair.

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